In a disclosure to the Philippine Stock Exchange on Tuesday, parent company Philippine Infradev Holdings Inc. said Makati City Subway Inc. (MCSI) signed investment agreements with Hui Gao Investments Development Ltd. and Shanghai Mintu Investments Ltd.
The deals were signed in Hong Kong on October 28, 2019.
MCSI is the corporate vehicle that will undertake the construction, operation, and management of the Makati City subway project.
Under the investment deal, MCSI and Huia Gao will subscribe to 51 million common shares or 34% of the corporate vehicle for a total issue price of $102 million.
Hui Gao will also provide a $200-million credit facility to MCSI.
"Proceeds from the investment shall be used for the construction and completion of the Makati City Subway System," Philippine Infradev said.
Payment of the subscription price shall be made 120 days from the signing.
Shanghai Mintu, meanwhile, subscribed to 15 million common shares of MCSI for a total issue price of $30 million.
The receipt of the $30-million subscription was acknowledged in full by MCSI.
"Finally, the Company, Shanghai Mintu, and Hui Gao Investments Development Ltd. issued letters of guarantee wherein they guaranteed to advance or fund the cost required for the completion of the Makati Subway System," Philippine Infradev said.
In October 2018, the city government awarded the public-private partnership project to the consortium of Philippine Infradev (formerly IRC Properties).
The consortium counts as members Philippine Infradev and its Chinese partners Greenland Holdings Group, Jiangsu Provincial Construction Group Co. Ltd. Holdings Ltd., and China Harbour Engineering Company Ltd.
In December 2018, Philippine Infradev broke ground for the Makati Subway project.
Philippine Infradev hurdled a 60-day competitive Swiss Challenge and obtained the approval from the Makati City Council on July 19 for the construction, operation and management of the intra-city subway.
Under the joint venture, Makati would only contribute land it currently owns for the project, and there will be no cash out from the city government.
Hui Gao Investments Development Limited is an affiliate of the Redco Properties Group. Redco is a HK publicly listed integrated property developer focusing on mid-to-high-end residential and commercial property development in the People’s Republic of China.
Shanghai MinTu is an investment holding group focusing on infrastructure, mass transportation, and financial services. The company built the Jiangyin Yangtze River bridge, the longest bridge in China and third longest in the world when it was completed in 1999.
The Makati subway would connect key points in Makati like the current Central Business District at the corner of Ayala and Sen. Gil Puyat Avenues, Circuit City, Makati City Hall, University of Makati, Ospital ng Makati and other new growth areas within the city.
The subway will have up to 10 air-conditioned, underground island stations which entrances will be linked to destinations across the city. It can accommodate up to six car trains, with room for over 200 persons per car, with more than 700,000 passengers per day to be accommodated and served by the proposed mass transport system.
Makati's intra-city subway is seen complementing the National Government’s mass transport projects as it would be connected to the proposed Metro Manila Mega Subway project, MRT stations, and the Pasig River ferry.
The Makati Subway is also expected to make a positive impact on neighboring cities as it will help decongest traffic, particularly in major thoroughfares.
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